Correlation Between Franklin Gold and Diversified Bond
Can any of the company-specific risk be diversified away by investing in both Franklin Gold and Diversified Bond at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Franklin Gold and Diversified Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Gold Precious and Diversified Bond Fund, you can compare the effects of market volatilities on Franklin Gold and Diversified Bond and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Franklin Gold with a short position of Diversified Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Gold and Diversified Bond.
Diversification Opportunities for Franklin Gold and Diversified Bond
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Franklin and Diversified is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Gold Precious and Diversified Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diversified Bond and Franklin Gold is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Franklin Gold Precious are associated (or correlated) with Diversified Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diversified Bond has no effect on the direction of Franklin Gold i.e., Franklin Gold and Diversified Bond go up and down completely randomly.
Pair Corralation between Franklin Gold and Diversified Bond
Assuming the 90 days horizon Franklin Gold Precious is expected to generate 4.05 times more return on investment than Diversified Bond. However, Franklin Gold is 4.05 times more volatile than Diversified Bond Fund. It trades about 0.05 of its potential returns per unit of risk. Diversified Bond Fund is currently generating about 0.03 per unit of risk. If you would invest 1,484 in Franklin Gold Precious on September 2, 2024 and sell it today you would earn a total of 383.00 from holding Franklin Gold Precious or generate 25.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Gold Precious vs. Diversified Bond Fund
Performance |
| Timeline |
| Franklin Gold Precious |
| Diversified Bond |
Franklin Gold and Diversified Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Gold and Diversified Bond
The main advantage of trading using opposite Franklin Gold and Diversified Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Gold position performs unexpectedly, Diversified Bond can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Diversified Bond will offset losses from the drop in Diversified Bond's long position.| Franklin Gold vs. Franklin Mutual Beacon | Franklin Gold vs. Templeton Developing Markets | Franklin Gold vs. Franklin Mutual Global | Franklin Gold vs. Franklin Mutual Global |
| Diversified Bond vs. Jp Morgan Smartretirement | Diversified Bond vs. Calvert Moderate Allocation | Diversified Bond vs. American Funds Retirement | Diversified Bond vs. Franklin Lifesmart Retirement |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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